Prentice Hall's Federal Taxation 2014 Corporations, 27e Chapter 9
Prentice Hall's Federal Taxation 2014 Corporations, 27e
Chapter C9 Partnership Formation and Operation
1) Formation of a partnership requires legal documentation filed with the Secretary of State.
Answer: FALSE
Page Ref.: C:9-2
Objective: 1
2) A partner's basis for his partnership interest can be negative.
Answer: FALSE
Page Ref.: C:9-5
Objective: 1
3) The holding period of a partnership interest acquired in exchange for a contributed capital asset begins on the date the partner transfers the asset to the partnership.
Answer: FALSE
Page Ref.: C:9-8
Objective: 3
4) A partnership cannot make charitable contributions.
Answer: FALSE
Page Ref.: C:9-16
Objective: 2
5) ABC Partnership distributes $12,000 to partner Al. Al's distributive share of partnership income is $20,000. Al is taxed on $20,000.
Answer: TRUE
Page Ref.: C:9-17
Objective: 6
6) A partner's "distributive share" is the partner's share of any assets distributed by the partnership.
Answer: FALSE
Page Ref.: C:9-17
Objective: 6
7) A partner's share of nonrecourse debt increases that partner's share of basis.
Answer: TRUE
Page Ref.: C:9-22
Objective: 7
8) A partner's basis for his or her partnership interest is increased by his share of the partnership's tax-exempt income.
Answer: TRUE
Page Ref.: C:9-24
Objective: 7
9) Limited partners must consider the at-risk, basis, and passive loss limitations when determining the amount of their deductible loss.
Answer: TRUE
Page Ref.: C:9-28 through C:9-29
Objective: 8
10) No gain is recognized on the sale of property between a partnership and a more-than-50% partner.
Answer: FALSE
Page Ref.: C:9-28
Objective: 8
11) Guaranteed payments are always ordinary income to the recipient.
Answer: TRUE
Page Ref.: C:9-28
Objective: 5
12) A partnership must file Form 1065 only if its income exceeds $1,000.
Answer: FALSE
Page Ref.: C:9-32
Objective: 12
13) Identify which of the following statements is true.
A) Formation of a
Chapter C9 Partnership Formation and Operation
1) Formation of a partnership requires legal documentation filed with the Secretary of State.
Answer: FALSE
Page Ref.: C:9-2
Objective: 1
2) A partner's basis for his partnership interest can be negative.
Answer: FALSE
Page Ref.: C:9-5
Objective: 1
3) The holding period of a partnership interest acquired in exchange for a contributed capital asset begins on the date the partner transfers the asset to the partnership.
Answer: FALSE
Page Ref.: C:9-8
Objective: 3
4) A partnership cannot make charitable contributions.
Answer: FALSE
Page Ref.: C:9-16
Objective: 2
5) ABC Partnership distributes $12,000 to partner Al. Al's distributive share of partnership income is $20,000. Al is taxed on $20,000.
Answer: TRUE
Page Ref.: C:9-17
Objective: 6
6) A partner's "distributive share" is the partner's share of any assets distributed by the partnership.
Answer: FALSE
Page Ref.: C:9-17
Objective: 6
7) A partner's share of nonrecourse debt increases that partner's share of basis.
Answer: TRUE
Page Ref.: C:9-22
Objective: 7
8) A partner's basis for his or her partnership interest is increased by his share of the partnership's tax-exempt income.
Answer: TRUE
Page Ref.: C:9-24
Objective: 7
9) Limited partners must consider the at-risk, basis, and passive loss limitations when determining the amount of their deductible loss.
Answer: TRUE
Page Ref.: C:9-28 through C:9-29
Objective: 8
10) No gain is recognized on the sale of property between a partnership and a more-than-50% partner.
Answer: FALSE
Page Ref.: C:9-28
Objective: 8
11) Guaranteed payments are always ordinary income to the recipient.
Answer: TRUE
Page Ref.: C:9-28
Objective: 5
12) A partnership must file Form 1065 only if its income exceeds $1,000.
Answer: FALSE
Page Ref.: C:9-32
Objective: 12
13) Identify which of the following statements is true.
A) Formation of a